KONSTANZ PROPERTIES (PTY) LTD v Wm SPILHAUS G EN KIE … · case concerned the commencement of prescription in respect of a claim ... B Senekal v Roodt 1983 (2) SA 602 (T) Southern

not always have been necessary or have been in the present context. The A comments of Van den Heever JA in Benson and Another v Walters and Others 1984 (1) SA 73 (A) at 86C-D, in my opinion, are a strong indication that the Appeal Court also regards it as a healthy principle. I also do not interpret the judgment of Thirion J in HMBMP Properties (Pty) Ltd v King 1981 (1) SA 906 (N) as a rejection of the principle. That g case concerned the commencement of prescription in respect o f a claim for damages which allegedly rose on repudiation of a contract. Thirion J points out at 91 ID that repudiation in itself does not complete the plaintiff’s cause of action [262], but that it depends on whether the creditor accepts the repudiation. That point of view, with respect, is correct (see eg Culverwell and Another v Brown 1990 (1) SA 7 (A) at C 161—17B, Metalm.il (Pty) Ltd v AECI Explosives and Chemicals Ltd 1994 SA 673 (A) at 685E-G). The argument based on the principle under discussion here, was not rejected in that case because the principle does not exist, but because it was not applicable to the facts.

Even if my simpler approach to the case, based on the meaning o f the p word claimable, should be incorrect, I would still uphold the special plea and dismiss the claim with costs on the basis of the principle that a creditor cannot postpone the commencement of prescription by means of his unilateral arbitrary conduct.

The order which I therefore make is that the defendant’s obligation to grant the plaintiff a pension has been extinguished by prescription. The E claim is therefore dismissed with costs.

KONSTANZ PROPERTIES (PTY) LTD v Wm SPILHAUS EN KIE (WP) BPK 251996 (3) SA 273 AD

KONSTANZ PROPERTIES (PTY) LTD v Wm SPILHAUS G EN KIE (WP) BPKAPPELLATE DIVISIONBOTHA JA, E M GROSSKOPF JA, NIENABER JA, MARAIS JA and SCOTT JA

H1996 March 7, 27 Case No 362/94

1996 (3) SA 273 (A)

Appeal from a decision in the Cape Provincial Division (Van der Westhuizen AJ). The facts appear from the judgment of Nienaber JA. |

J J Botha for the appellant (plaintiff).Wde Haan for the respondent (defendant).Apart from the authorities cited in the judgment of the Court, counsel

for both parties referred to the following authorities:Barclays Western Bank Ltd v Fourie 1979 (4) SA 157 (K) J

26 KONSTANZ PROPERTIES (PTY) LTD v Wm SPILHAUS EN KIE (WP) BPKNIENABER JA 1996 (3) SA 273 AD

A Borstlap v Spangenberg en Andere 1974 (3) SA 695 (A) op 704F-HKalil v Decotex (Pty) Ltd and Another 1988 (1) SA 943 (A) op 981D-G Melcorp SA (Pty) Ltd v Joint Municipal Pension Fund (Transvaal) 1980 (2)

SA 1214 (W) op 223C Saflec Security Systems (Pty) Ltd v Group Five Building (East Cape) (Pty) Ltd

1990 (4) SA 626 (OK)B Senekal v Roodt 1983 (2) SA 602 (T)

Southern Life Association Ltd v Beyleveld NO 1989 (1) SA 496 (A) op 5031 Western Bank Bpk v Trust Bank van Afrika Bpk en Andere NNO 1977 (2) SA

1008 (O) op 1021C-E.

Cur adv vult.C

Postea (March 27).

Nienaber JA:

q IntroductionThe appellant., a company, is the owner of the farm Konstanz in the

Jonkershoek Valley, Stellenbosch. Its manager, Kriel, concluded an agreement with a close corporation, Pumps for Africa CC (Pumps for Africa), represented by a certain Killian, to install an irrigation and

£ circulation system (the system) on the farm. Pumps for Africa bought the components for the system, consisting of pumps, pipes, key pieces, valves, etc from the respondent, a wholesaler in Bellville, represented by a certain Joubert. In terms of the agreement the respondent preserved ownership of the equipment sold pending payment of the full purchase price by Pumps for Africa. The respondent delivered the goods to Pumps

for Africa, Pumps for Africa installed the system on the appellant’s farm; the appellant paid Pumps for Africa; but Pumps for Africa failed to pay the respondent. The respondent obtained default judgment against Pumps for Africa in the Cape Provincial Division in.case no 8805/93 for payment of the amount of R34 176,18 together with interest and costs.

G It was further ordered:‘3. Should payment not be made within 10 days of judgment:

3.1 defendant is directed to return the goods purchased as set out in annexures “ E” to “ Y” within three days,

3.2 failing compliance with 3.1 the Deputy Sheriff is to attachL, and deliver the aforesaid goods to plaintiff.’

In execution o f the Court order the deputy sheriff attempted to attach the equipment on the appellant’s property. His return reads, inter alia:

CI thereupon judicially attached the list of articles mentioned in the document “E-Y” but did not remove them on the client’s instructions as parts were built in on the abovementioned farm.’

The appellant launched an application in the Cape Provincial Division that the earlier judgment be rescinded and furthermore requested an order

‘declaring that the abovementioned applicant is the owner of all ofthe items referred to in the said order and which are at present in the

J applicant’s possession’ .

KONSTANZ PROPERTIES (PTY) LTD v Wm SPILHAUS EN KIE (WP) BPK 27NIENABER JA 1996 (3) SA 273 AD

Before the application was heard, the parties represented by their A respective counsel concluded an agreement with inter alia the following purport:

‘For purposes of the adjudication of this application the parties agree that the respondent’s claim in accordance with this honourable Court’s order of all the components of the irrigation system which were bought from the respondent by □ Pumps for Africa and installed on the applicant’s farm by Pumps for Africa should be regarded as if the respondent claims those components with the rei vindicatio from applicant. [279] Any order which is made in this application shall therefore have the same legal consequences as it would have had, had the respondent claimed the components with the rei vindicatio.’

Two issues in particular are involved: Q(1) did the equipment become part of the appellant’s property

through accessio(2) is the respondent precluded by estoppel from invoking its

reservation of ownership?The Court a quo (Van der Westhuizen AJ) decided both issues in

favour of the respondent. The following order was made:‘(a) Applicant’s application is dismissed and the respondent’s rei vindicatio

succeeds. Applicant is ordered to allow respondent to remove the items installed in the pumphouse on the farm Konstanz and specified in annexures E and Y of the court order issued in case No 8805/93 in the case between Wm Spilhaus & Co (WP) Ltd and Pumps for Africa CC [r subject to paras (b) and ( z) infra.

(b) Respondent is ordered to carry out the removal of the said items with great care and immediately to repair any damage which may be caused to the pumphouse (or any other components which are not removed).

(c) Respondent must give reasonable notice to the applicant of its intentionto remove the said items. Such period may not be less than 10 days and p need not be more than 30 days in order to enable applicant to acquire replacement components timeously.

(d) Applicant is ordered to pay the respondent’s costs in the action.’It is against these orders that the applicant now appeals to this Court

with the leave of the Court a quo.G

Accessio

The first question is whether the system became part of the land. If it in fact didj the appellant is the owner thereof and the appeal must succeed without more ado. If not, the respondent was still the owner of the particular items and this raises the second question whether the H respondent’s claim for the return thereof is not thwarted by the appellant’s reliance on estoppel.

The system was designed and installed by Killian of Pumps for Africa.It is served by a reservoir which was built according to the design of a landscape architect at a cost o f approximately R400 000. On the one ,hand the dam is used for irrigation of a garden area of approximately 1,5 hectares and on the other hand for a trout hatchery. The circulation system serves to regulate the oxygen content in the water for the trout. The whole system is controlled by a computer. A pumphouse was built at a cost of approximately R15 000 and was supplied with electricity. It is a brick building with a slate roof, a sturdy foundation and a concrete J

A floor. Two pumps are anchored with bolts to the concrete floor in the pumphouse. The pumps are powered by two electric motors, one of four and one of 7,5 kilowatts also bolted to the concrete floor.

Killian states:‘Both of these pumps have a so-called suction side and an outlet side. The

g suction side consist of an asbestos pipe which runs from the dam. At the point where it is mounted in the dam a foot valve is attached to it. At that point [280] it is cast in the concrete together with the pipe. It is cast in the concrete approximately six metres under the water level. . . . The asbestos pipe runs from the dam to the pumphouse and is buried approximately six metres underground. The earth above it has been specially compacted. In order to remove this pipe,

q the dam would have to be emptied and heavy duty excavation equipment would have to be used.’

The asbestos pipe is cast in concrete on the outside of the pumphouse and fastened with bolts on the inside to a 100 millimetre valve and is eventually connected by means of special adapters to the pumps. The four kilowatt pump is connected to a 75 mm plastic PVC pipeline which is cast with concrete in the floor of the pumphouse and in turn is attached to a 250 metre long pipeline installed three metres underground. The 7,5 kilowatt pump is also connected to the main pipeline, a 90 mm PVC plastic pipe, also buried three metres deep, which is part of a whole network of pipes. Killian continues:

CI wish to point out that none of the pipelines which form part of this entire system, can be moved. They are also installed in such a manner so that they should be of a permanent nature without ever being moved.’

Both pumps are connected to an electrical panel and are controlled by a computer. Killian states:

‘The system serves an area of approximately 1,5 hectares and it eventually forms a web of pipes, electric cables and also electric valves.’

The underground pipes cover an area of approximately five kilometres and are fitted with 800 sprinklers. Finally Killian declares:

‘All the components to which I have referred above, form an integral part of the total permanent irrigation and circulation system and when I planned and installed it, I did this with the idea that it would be of a permanent nature. Had the intention been that these components would be moved, I would have carried out the whole installation in another manner.’To this Meyer, the group manager of the respondent, answered as

H follows:‘I deny that the pumps, filters and other components are an integral part of the

system and say that each component is an entity of which the identity has been fully preserved which can be removed without damage to itself or to any other component by simply unbolting it. I admit that most of the pipes and cables are buried but do not know how deep and say that such buried pipes and cables can

I be dug up and removed with no damage to the pipe or cable and with minimal damage to the soil which after replacement would be invisible.’

Despite the last averment the respondent does not claim the return of all the components which were sold by him to Pumps for Africa. The agreement entered into by counsel for the respective parties before the

J commencement of the hearing of the application, reads as follows:


E

F


‘It is also hereby placed on record that respondent, during the hearing of this A application, formally waived any right which the respondent might have to any component which is not installed in the pumphouse, and indicated that respondent only continues to claim from applicant those components which are installed in the pumphouse.’

In essence, in this case, what is involved are only the articles in the g pumphouse, more specifically the pumps with their respective connections and accessories. [281]

Whether movables become fixtures by attachment, depends on circumstances. No single criterion can provide for all cases. That is why Innes CJ in the leading decision, MacDonald Ltd v Radin NO and the Potchefstroom Dairies & Industries Co Ltd 1915 AD 454 at 466, first C emphasised that ‘each case must depend upon its own facts’ before mentioning the different circumstances which are normally taken into consideration, to wit,

(a) the nature of the movable which is attached— with the emphasison its capacity of acceding to the immovable; p

(b) the manner of attachment— with the emphasis on the integration of the movable with the immovable and whether the movable can be removed without damaging the one or the other;

(c) the intention with which the attachment occurred— with theemphasis on whether the attachment was intended to be permanent (cf further, Newcastle Collieries Co Ltd v Borough of Newcastle E 1916 AD 561 at 564-6; Van Wezel v Van Wezels Trustee 1924 AD 409 at 414; Standard-Vacuum Refining Co of SA (Pty) Ltd v Durban City Council 1961 (2) SA 669 (A) at 677E-678C; Theatre Investments (Pty) Ltd and Another v Butcher Bros Ltd 1978 (3) SA 682 (A) at 688D-H). F

One view (described as the ‘traditional5 approach) is that (c) only matters where (a) or (b)3 viewed objectively, are ambiguous; likewise, that (c) can do nothing to alter the matter where (a) or (b) are not ambiguous. Another view (described as the new approach) is that (c)3 the subjective intention, sometimes expressed as the ipse dixit, is decisive and that (a) and (b) as a question of degree are merely indicative o f (c)(cf Van der Merwe Sakereg 2nd ed at 254-5; Silberberg and Schoeman The Law of Property 3rd ed at 209-11). A further variant is the omnibus approach of Van Zyl J in Sumatie (Pty) Ltd v Venter and Another NNO 1990 (1) SA 173 (T), which is criticised by Silberberg and Chemin (op cit at 212) on the basis thereof that the sources cited do not support the H proposed formulation and that it is doubtful whether the proposed formulation will really contribute to a practical solution of this type of problem. (Cf also Van der Merwe 1990 Annual Survey of South African Law at 216.)

Following on the different approaches the further question arises: .whose intention? That of the owner of the movables, that of the annexor or that of the owner of the land?

In numerous dicta, as in the MacDonald case itself, supra at 466, reference is made to the intention of the annexor. (See for example, to refer only to decisions of this Court, Newcastle Collieries Co Ltd v Borough of Newcastle (supra at 564); R v Mabula 1927 AD 159 at 161; Pettersen J


A and Others v Soroaag 1955 (3) SA 624 (A) at 628A-D; Standard-Vacuum Refining Co of SA (Pty) Ltd v Durban City Council (supra at 678C.) Theatre Investments (Pty) Ltd v Butcher Brothers Ltd (supra at 688D—F).) On the face of it this makes sense because after all the inquiry is directed at the circumstances relating to the attachment as such. There is

g therefore something to be said for it that his point of view ought to be relevant when there is a dispute whether a particular attachment [282] was intended to be permanent or merely o f a temporary nature. The owner of the movables is not necessarily involved in the attachment as such; indeed he may possibly, as in the present case, not even be aware thereof.

C In none of the cases mentioned supra, except for the MacDonald case supra, did it matter on the facts whose intention had to be examined, because in all the cases the annexor was at the same time also the owner of the movables. Thus in Trust Bank of Africa Ltd v Western Bank Ltd and Others NNO 1978 (4) SA 281 (A) at 295E, reference is made for example

q to the owner-annexor. MacDonald (supra) was an exceptional case in so far as the seller-owner of the movable, a 12 ton refrigeration apparatus with accessories, carried out the installation thereof at the instance o f the hire purchase-purchaser but was still not regarded as the annexor. {C f however, Commissioner for Inland Revenue v Le Sueur 1960 (2) SA 708 (A) at 712H.) The apparatus was installed in such a manner that it could

E easily be removed. When the hire purchase-purchaser went bankrupt before payment, the question arose: who was entitled to the apparatus, the appellant, as seller with reservation of ownership, or the respondent on whose land the apparatus was installed? The Trial Court decided the latter, this Court the former. Both Courts held the view that the hire

p purchase-purchaser was the actual annexor who in this regard merely made use of the services of the seller. According to Innes CJ the intention of the owner of the movables is decisive:

‘Were it otherwise, the ownership of the property would be dependent upon the mental attitude of a man to whom it did not belong (the hire purchase- purchaser), and who did not intend to deprive the true owner of his rights.5

G (At 469.)Some of the authors, such as Van der Merwe (op cit at 257) and Carey

Miller The Acquisition and Protection of Ownership at 32-3, point out that in the case of accessio by rights one is not dealing with a derived form of transfer of ownership. The view that it is the intention of the owner of the

H movables rather than the intention of the annexor which is relevant, was nevertheless followed in later cases without criticism (cf however, Cape Town & District Gas, Light & Coke Co Ltd v Director of Valuations 1949 (4) SA 197 (C) at 202) (cf further Land and Agricultural Bank of SWA v Howaldt and Vollmer 1925 SWA 34 at 36-8; Champions Ltd v Van Staden

. Bros and Another 1929 CPD 330 at 333; Clarke v Uhlman 1943 CPD 124 at 127; Van Rooyen v Baumer Investments (Pty) Ltd 1947 (1) SA 113 (W) at 117; Bester v Marshall 1947 (3) SA 206 (SR) at 208-9; Trust Bank of Africa Ltd v Western Bank Ltd and Others NNO (supra at 295E); Falch v Wessels 1983 (4) SA 172 (T) at 179D-180A). The Court a quo was bound by this decision and based its judgment on it.

J Counsel for the appellant did not contend in this Court that this


approach, which originated in the judgment of Innes CJ in the Mac- A Donald case supra, must be reconsidered. This question was accordingly not argued.

His contention was that the manner of attachment made it unnecessary to go into the intention with which the attachment was made, alternatively, [283] if one had to examine the respondent’s intention, that g in any case he acquiesced in the permanent annexure of his property to the appellant’s land.

During argument the first leg of this contention unfolded as follows: all the pipes, components, pumps etc which Pumps for Africa bought from the respondent, were connected and strung together in one integrated system. Sections thereof, such as the five km long pipeline, were installed C underground, the ground was compacted and it could only be removed with difficulty, at a cost and damage. The respondent in fact had waived his claim to everything except for the property in the pumphouse and as such in effect conceded that the rest had become a fixture. The installation of the system was part of the long term planning of the q property. Without it the contemplated activities on the farm could not be proceeded with. As such the entire system was destined to become a permanent part of the farm. It was integrated into a physical, economic and functional entity. Everything formed part of a unit and the unit formed part of the land. Consequently it is unnecessary to examine the intention with which the attachment was carried out. E

The respondent’s answer was that the system was not physically indivisible: the articles in the pumphouse retained their independent identity and could be removed without much difficulty or damage. In actual fact this was not a case where the nature and manner of attachment, in any event as far as the goods in the pumphouse were p concerned, were decisive witihout more ado. As far as the alleged functional integration was concerned, reference was made to what was said in Caltex (Africa) Ltd and Others v Director of Valuations 1961 (1) SA 525 (C) at 529C-G:

‘There was much discussion in argument about the question whether the pipes q could be said to be an “ integral part” of the “whole installation” . Language of this nature is apt to be misleading when applied to an enquiry as to movability or immovability. The article in issue could well be an integral part of something which in some sense could be said to be a unit or entity, without the article itself becoming immovable. If the unit or entity is something physical and immovable, like a house, then an article which is in a physical sense an integral part thereof, |_| like a door or window, would naturally also be immovable. But where a complex of things is said to be a unit or entity in a mere functional sense, eg with regard to an activity such as production, construction, storage or the like, then nothing is gained in an enquiry of the instant kind by labelling an article as an “ integral part” of that unit. Such a unit could obviously consist of things movable as well as immovable; and the character of each component must be determined with j reference to the principles and criteria applied earlier in this judgment. For the reasons already stated there is in my view no justification for regarding the pipes in the present case as being in a physical sense an integral part of any immovable thing.’

Merely to consider the nature and manner of attachment, without taking into account the intention with which the attachment was J

A made, amounts essentially to the so-called ‘traditional’ rather than the ‘new’ approach, to which reference was made earlier, being given preference.

If the intention is taken into account, it is significant that the owner of the movables in this case, quite different from what happened in the

g MacDonald case, did not sell a completed system. What was sold was a number of loose items, under separate invoices, each with its own price. From [284] the latter’s point of view, there was therefore no question of an economic or functional unit. Only from Pumps for Africa and the appellant’s point of view could it be regarded as an economic and

q functional unit— and this pertinently raises the question whether the annexor’s intention, in the light of the MacDonald decision supra, is relevant at all, even more so where the annexor, in this case Pumps for Africa, like the annexor in the MacDonald case supra, knew that the that the owner of the annexed property reserved ownership.

In my opinion the first leg of the argument can only be decided if finality is reached concerning the two controversial questions which have just been mentioned (the correct approach; whose intention is relevant). During argument the two questions were hardly touched upon and without proper argument I am disinclined towards pronouncing a considered opinion in this regard.

E The second leg of the appellant’s argument is founded on it being the intention of the respondent which is of importance. The respondent knew that Pumps for Africa, from the nature of its business, would build the purchased items into somebody’s irrigation system; parts thereof were in fact, as Meyer conceded on behalf of the respondent, ‘custom

F made connecting pipes in the pumphouse’ . Consequently it can be accepted, according to the submission, that the respondent reconciled itself with the eventual destination of the items as a permanent part of somebody else’s system; briefly that the respondent intended that the items sold would permanently become part of some stranger’s property.

q The submission is in contradiction with clause 2 of the agreement between the respondent and Pumps for Africa and with the affidavits filed on behalf of the respondent, to wit that the respondent never intended relinquishing its ownership before each and every item had fully been paid for. No reasons were suggested as to why this statement

l_l must be ignored. The submission cannot be upheld.If it is the respondent’s intention which is decisive, then the Court a

quo was naturally correct as far as the issue of accessio is concerned. But this conclusion is based on the acceptance of a dogmatic standpoint which might, particularly in the light of the misgivings expressed against the approach in the MacDonald’s case supra, possibly be reconsidered in

I the future. At present this cannot happen, because the appellant did not argue its case on that basis. As a result I am prepared to assume against the appellant and in favour of the respondent that the MacDonald test supra still applies, that the respondent’s intention therefore prevails and that the appeal based on accessio therefore has to fail. Consequently it is

J necessary to examine the question of estoppel.


KONSTANZ PROPERTIES (PTY) LTD v Wm SPILHAUS EN KIE (WP) BPK 33NIENABER J A 1996 (3) SA 273 AD

Estoppel

An owner’s rei vindicatio can be warded off with estoppel where(a) he makes a representation towards the person raising estoppel

which reasonably misleads the latter into the belief that somebody else, either as owner or as a person authorised thereto, was entitled to transfer ownership of the property to the person raising estoppel; and

(b) such representation must have been made with culpa's and [285](c) the person raising estoppel on the basis thereof acted to his

detriment (Grosvenor Motors (Potchefstroom) Ltd v Douglas 1956(3) SA 420 (A); Johaadien v Stanley Porter (Paarl) (Pty) Ltd 1970(1) SA 394 (A); Oakland Nominees (Pty) Ltd v Gelria Mining & Investment Co (Pty) Ltd 1976 (1) SA 441 (A); Pretorius v Loudon 1985 (3) SA 845 (A); Quenty’s Motors (Pty) Ltd v Standard Credit Corporation Ltd 1994 (3) SA 188 (A)).

The respondent’s standpoint is that the appellant did not prove that(a) the respondent made the representation towards it that Pumps for

Africa were entitled to transfer ownership in the property to the appellant; and

(b) that the respondent was negligent. (Cf B & B Hardware Distributors (Pty) Ltd v Administrator, Cape, and Another 1989 (1) SA 957 (A) at 964H-965B.)

The material on which the defence of estoppel is based, is indeed scanty. Kriel, who speaks for the appellant, merely alleges that he accepted the recommendations of Killian of Pumps for Africa concerning the installation of the system and that the planning and installation thereof took place under his direct supervision; that he was unaware of the existence of the said clause of the agreement; that the respondent ought to have realised that any customer of Pumps for Africa buying equipment supplied by the respondent to Pumps for Africa would have laboured under the misconception that Pumps for Africa was the owner of the property and was as a result entitled to sell it; that the respondent did nothing to remove that misconception on the part of customers of Pumps for Africa; and that he himself laboured under that misconception when the appellant ordered the goods and paid for them.

What Kriel does not expressly say is in precisely what manner the respondent created the impression, why he, Kriel, was under that impression and in what regard the respondent was ostensibly negligent.

It is mainly on the basis of these apparent lacunae in the appellant’s case that its defence of estoppel failed in the Court a quo.

Kriel’s averment must however not be seen in isolation. Kriel and Joubert also made affidavits and if the three versions are read together, they indicate the following:

1. The respondent is a wholesaler that supplies pumps and other irrigation apparatus and accessories to inter alia Pumps for Africa, a retailer.

2. This took place with reservation of ownership.


A 3. The respondent is aware of the general nature of the business ofPumps for Africa, namely planners, designers and suppliers of irrigation systems to farmers.

4. Notwithstanding the reservation of ownership credit was granted to Pumps for Africa. Nothing in the agreement between the

g respondent and Pumps for Africa prohibited the latter fromselling the property before expiry of the period of credit. [286]

5. The goods which were supplied by the respondent to Pumps for Africa and by Pumps for Africa to the appellant, consist of components and accessories for an irrigation system.

6. Killian approached Joubert, an employee of the respondent, forC expert advice.

7. In the light of his own expertise Joubert had to be aware that the goods were destined to be resold by Pumps for Africa.

8. Pumps for Africa did not inform Kriel that ownership in the articles was reserved by the respondent and Kriel did not become

□ aware thereof from any other source.9. The appellant bought the equipment and accessories in good

faith, had it installed and paid for it while he was completely under the impression that Pumps for Africa was entitled to transfer ownership in the property to the appellant.

According to the Court a quo this combination of circumstances did ^ not justify the inference that the respondent created the impression

towards the appellant that Pumps for Africa was entitled to transfer ownership in the articles to the appellant.

It is in fact the position that an owner does not place his ownership at risk merely by entrusting the property into the care or possession of

F another (cf Electrolux (Pty) Ltd v Khota and Another 1961 (4) SA 244 (W) at 246H-246E, 247H-248A; Oakland Nominees (Pty) Ltd v Gelria Mining & Industrial Co (Pty) Ltd (supra at 452A-G)). A lot more is required before there can be any mention of estoppel. There was in fact something more here. A wholesaler provided goods on credit to a retailer while he

r knew that the latter’s business was to sell the goods in turn to members of the public. In my opinion, this is analogous to the case where an owner allows his property to become part of the stock in trade of a public vendor, who according to expectation and in the normal course of business sells it to members of the public. In those circumstances it was decided in our law on more than one occasion that the owner is

H prevented from relying on his ownership towards an innocent third party who buys the property from the dealer. (Cf Morum Bros Ltd v Nepgen 1916 CPD 392 at 404; Ross v Barnard 1951 (1) SA414 (T), United Cape Fisheries (Pty) Ltd v Silverman 1951 (2) SA 612 (T) Electrolux (Pty) Ltd v Khota and Another (supra) and Akojee v Sibanyoni and Another 1976 (3)

■ SA 440 (W).) In Ross v Barnard (supra) Clayden J at 420B-D stated as follows:

‘Ordinarily where the owner has entrusted property to another, or knows that another has his property with knowledge of his ownership, the only risk of disposal of his property to a bona fide purchaser is the likelihood of a dishonest act by the possessor. In such cases ordinarily the proximate cause of the prejudice

J to the bona fide purchaser is the dishonest act of the possessor. Here what the


owner might anticipate was not a possible dishonest act by a possessor, but an A almost certain sale by a possessor who claimed the right to sell, whose business it was to sell, and to whom the general public came to buy. Except that the goods here were not “ sold” to the shopkeeper this is the illustration given by Juta JP in Morum Bros Ltd v Nepgen (supra).’ [287]

And in the Electrolux case supra at 247B-E Trollip J states, in a dictum which is cited with approval by this Court in Quenty’s Motors (Pty) Ltd v ^ Standard Credit Corporation Ltd (supra at 199C-F):

‘To give rise to the representation of dominium or jus disponendi, the owner’s conduct must be not only the entrusting of possession to the possessor but also the entrusting of it with the indicia of the dominium or jus disponendi. Such indicia may be the documents of title and/or of authority to dispose of the articles, as, for q example, the share certificate with a blank transfer form annexed, as in West v De Villiers 1938 CPD 96, and the other cases referred to therein; or such indicia may be the actual manner or circumstances in which the owner allows the possessor to possess the articles, as, for example, the owner/wholesaler allowing the retailer to exhibit the articles in question for sale with his other stock in trade (see Morum Bros3 case supra at 402-3, 404; United Cape Fisheries (Ply) Ltd v Silverman 1951 q (2) SA 612 (T); Ross v Barnard 1951 (1) SA 414 (T) at 420C-E). In all such cases the owner “provides all the scenic apparatus by which his agent or debtor may pose as entirely unaccountable to himself, and in concealment pulls the strings by which the puppet is made to assume the appearance of independent activity. This amounts to a representation, by silence and inaction . . . as well as by conduct, that the person so armed with the external indications of indepen- [= dence is in fact unrelated and unaccountable to the representor, as agent, debtor, or otherwise.” (Spencer Bower on Estoppel by Representation at 208.)’

It is apparent from the said decision that in our law a need exists to protect the bona fide purchaser of property at the expense of the true owner thereof if the owner allows the property to be sold as part of the wares of a public vendor in the normal course. F

The latest judgment in this vein is Quenty3s Motors (Pty) Ltd v Standard Credit Corporation (supra). The appellant delivered his two luxury cars, on consignment to a motor dealer. Love Motors Durban CC, owned by a certain Love. The understanding was that Love Motors could sell each of the vehicles in its own name. Should it succeed, the purchase price q after deduction of the commission would be paid to the appellant and ownership would be transferred to Love Motors. Should it not succeed, the vehicles would be returned to the appellant. With the appellant’s knowledge the cars were exhibited on the floor at Love Motors as part of its stock in trade. Love Motors sold the vehicles under a floor plan agreement to the respondent, a finance company. The respondent paid Love Motors, but Love disappeared with the money without paying the appellant. The respondent took possession of the vehicles.The appellant claimed them on the basis of its ownership. Its application failed in the Court a quo as well as on appeal. Nicholas AJA stated at 199J-200B:‘The vehicles were to be delivered to Howard Love; they were to be exhibited for I sale at Love Motors; and it was contemplated that they would be sold, and that when each was sold Howard Love would pay Quenty’s Motors therefor. It is not disputed that the two vehicles were displayed in the showroom of Love Motors, together with other vehicles displayed by it for sale. When Mohamed Ahmed (a director of the appellant) went to Durban on 26 November 1990 he looked for the vehicles at the premises of Love Motors. Adapting the words of Trollip I, J

A Love Motors dealt with the vehicles with Quenty’s Motors5 consent [288] in such a manner as to proclaim that the dominium or jus disponendi was vested in Love Motors. Holmes JA’s first requirement was satisfied.’

(The first requirement, to which reference is made, is the statement of Holmes JA in the Oakland Nominee case supra at 452A:

g ‘that an owner is estopped from asserting his rights to his property only—(a) where the person who acquired his property did so because, by the culpa

of the owner, he was misled into the belief that the person, from whom he acquired it, was the owner or was entitled to dispose of it;. . . ’ .)

The same argument also applies here. By providing Pumps for Africa, a retailer, with the goods in the knowledge that they would become part

C of the latter’s stock in trade, and as such in the normal course of events be freely alienable, the respondent by its conduct, in my view, represents to any client of the retailer buying such goods that the dealer has the authority to transfer ownership thereof to the buyer.

Factually the representation, contrary to what the Court a quo held, q was therefore proved, although not in those precise words as set out in

the appellant’s affidavit.The following question is whether negligence was also proved on the

part of the respondent. What was said in this regard in Quenty’s Motors (Pty) Ltd v Standard Credit Corporation Ltd (supra at 200B-C) applies equally to the present case:

^ ‘In regard to the second requirement (negligence), Mohamed Ahmed should reasonably have contemplated that a prospective purchaser might act on the representation to his prejudice, and he was negligent in not taking reasonable steps to prevent it.’

Here too the respondent should reasonably have foreseen that a buyer p in the appellant’s position could possibly be misled and prejudiced.

Quite differently from the type of case where an intermediary alienates the property unexpectedly in a thieving or fraudulent manner (cf Grosvenor Motors (Potchefstroom) Ltd v Douglas (supra); Oakland Nominees (Pty) Ltd v Gelria Mining & Industrial Co (Pty) Ltd (supra)), the actual alienation transpired here with the approval and in accordance with the expectation of the owner. Pumps for Africa was entitled to alienate the articles in the normal course of its affairs before it made payment to the respondent. The respondent was aware of the possibility that Pumps for Africa could possibly not settle its debt. For that reason ownership was reserved. But the reservation of ownership created the further foresee-

H able possibility which was not guarded against, that an unsuspecting client of Pumps for Africa such as the appellant would buy the goods in question and pay for them under the impression that he would become owner thereof by delivery. Hence the negligence and hence the estoppel. Negligence in this sense is clear, even if it was not plainly averred in the

I papers. (Johaadien v Stanley Porter (Paarl) (Pty) Ltd (supra) which required that negligence must be specifically alleged, was an exception.) The result is that the respondent’s reservation of ownership cannot succeed against an innocent buyer; it could only have prevailed had the goods still been in the possession of Pumps for Africa when respondent laid claim to them.

J In my opinion the representation and negligence requirements were


SCHIPPER v DE BOD NO AND ANOTHER 37MYNHARDT J 1996 (3) SA 309 TPD

complied with for the successful invocation of estoppel. [289] The other A requirements for estoppel were not in dispute. The appellant’s invocation of estoppel was therefore wrongly dismissed by the Court a quo.

The following order is made:(1) The appeal succeeds with costs.(2) The order of the Court a quo is set aside and substituted with the g

following order:(1) Paragraphs 3.1 and 3.2 of the Court order, dated 2 September

1993, in case No 8805/93, are set aside.(2) It is declared that the respondent is not entitled to the return of the

items mentioned in annexures E to Y to the summons in the said case No 8805/93. C

Botha JA, E M Grosskopf JA, Marais JA and Scott JA concurred.

D

SCHIPPER v DE BOD NO AND ANOTHERTRANSVAAL PROVINCIAL DIVISIONMYNHARDT J

1994 May 19 1996 (3) SA 309 (T)

Application for the review and setting aside of a decision of the first respondent. The facts appear from the judgment.

S J J van Niekerk for the applicant. GNo appearances for the first respondent.G Bofilatos for the second respondent.

Mynhardt J: This is an application for review of the first respondent’s decision of 6 December 1993 that the applicant’s legal representative H was not entitled to cross-examine a witness who testified during proceedings which were held in terms of the provisions of s 22 of the Agricultural Credit Act 28 of 1966 (‘the Act’), and, secondly, that the applicant’s legal representative was only entitled to question witnesses whom he represented. I

The relief requested by the applicant is that the decision of the first respondent be reviewed and set aside and that it be substituted with an order in terms whereof it be declared that the applicant’s legal representative is in fact entitled to question the witness, who has already testified, Mr Visser, and that he is also entitled to examine other witnesses who may still be called and examined, in addition to Mr Visser. What it J

Case No 1572/94 p

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